Given below is the balance sheet for the Bank of New Providence:
| Assets ($1,000,000s) | Liabilities ($1,000,000s) | ||
|---|---|---|---|
| Cash | 52 | Deposits | 650 |
| T-bills and Bonds | 257 | Long-term debt | 326 |
| Loans to Other Banks | 95 | Equity | 88 |
| Commercial Loans | 364 | ||
| Mortgages | 296 | ||
| Total | 1,064 | Total | 1,064 |
The net profit for the bank was $10.3 million. A required reserve is specified at 5% of deposits. What is the bank’s ROE?
At the beginning of 2013, Gonzales Acosta&Ngo (GAN) had accounts receivable of $84,000. At the end of 2013, the company had accounts receivable of $72,000. During 2013, GAN had total sales of $1,100,000, all of which were credit sales.
What was this company’s average collection period for 2013?
a. 15.49 times
b. 14.10 times
c. 17.19 times
d. 23.6 days
e. 25.9 days
In the “liquidity index” measurement scheme, which of the following is/are true?
a. The index is higher if the bank’s assets are more liquid.
b. The index is higher if the bank’s assets are less liquid.
c. The index is higher if immediate asset liquidation requires lower prices.
d. b and c
e. a and c
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